A look at the startups that can hit billion-dollar valuation soon

In an effort to find the next big thing in India's startup ecosystem, ET Magazine reached out to some of the sharpest minds in venture investing.Rahul Sachitanand, Malini Goyal&Rajiv Singh | ET Bureau | January 03, 2016, 09:09 IST

15 startups that appear best placed to enter the $1 billion valuation club but, even if they get into it, it won't be easy staying there.Depending on who you ask, the amount of risk capital that was poured into Indian startups in 2015 is estimated at between $5 and $10 billion. Thousands of starry-eyed entrepreneurs have built seemingly bulletproof business plans to try to attract seed and angel funding. Only a fraction of those have gone on to earn the faith of deep-pocketed venture capitalists. In this rarified group, too, the odds of scaling a business from being valued at a few million dollars to tens of millions, hundreds of millions and hopefully a billion — the exalted status of a startup unicorn — is increasingly minute. Despite all the excitement over startups, there are barely eight unicorns in India. Several once promising ideas have floundered as business plans have got stuck and funding taps turned off.While the exclusive club led by Flipkart in India (valued at over $15 billion with its last round of funding) has remained rather cosy, a bunch of younger startups think they have what it takes to be added to this group. For example, Grofers, a hyperlocal grocery delivery venture, has seen its valuation grow 10-fold in 12 months.

Budget accommodation upstart OYO Rooms is barely two years old, valued at around $400 million and a strong contender to make the leap to be valued at a billion dollars. Away from the startup arc lights in Bengaluru and Gurgaon, the founders of CarDekho in Jaipur have negotiated a crowded market to build an online automobile portal valued north of $300 million. Another company in this listing, Shop-Clues, endured a torrid 2013, with its chief executive and cofounder being arrested in the US, before bouncing back with a $100 million round of funding in January 2015, valuing the company reportedly at $300-350 million.

Despite these impressive sounding numbers, there are no guarantees of success in the fickle world of startups — which has resulted in the birth of the nemesis of the unicorn: the unicorpse, or former unicorns that are now valued below a billion dollars.

Consider the case of housing.com, founded by a dozen IIT classmates barely three years ago, which sought to reimagine the way real estate was transacted online.

While business bloomed in the beginning, growing tensions between investors and a maverick chief executive saw the company’s fortunes nosedive. Once listed as a strong candidate to make the leap to a startup unicorn, bankers and investors now say the company’s valuation may be half or a third of what it was at its peak.

As a startup valued at a billion dollars, ventures are no longer unstructured, wild ideas from a bright founder or team of founders. As companies seek to hit this unicorn status, they have to deal with dozens of investors and manage an increasingly complex business, even as they keep hunting for new ways to grow. Founders are acutely aware of these challenges, with some trying to play down the halo associated with this tag.

The tag does however confer a certain pedigree on your business. A billion-dollar valuation gives founders access to some of the biggest investors, an opportunity to build multibillion businesses and at the end of the day bragging rights to have survived a bruising initial few years of starting up.

In an effort to find the next big thing in India's startup ecosystem, ET Magazine reached out to some of the sharpest minds in venture investing to curate a list of 15 companies we think will be the next entrants into this elite club. Read on for a profile of these white-hot upstarts in alphabetical order:

Azure Power - a pioneer of sorts in solar power

(Inderpreet Wadhwa, founder of Azure Power)

Inderpreet Wadhwa, founder of Azure Power, comes with a compelling pedigree. Born and educated in India he moved to the US where he did his MBA from the University of California, Berkeley. He went on to hone his entrepreneurial skills in Silicon Valley, where he lived for a decade and worked at a raft of tech ventures.

It was in 2007, when on a personal trip to India, that the startup bug bit and solar fever struck. "Talking to government folks here made me feel there was enormous potential (in the solar energy sector),” he recalls. Even the challenges — both internal and external — were enormous. There was no regulatory framework for solar power in India then. Cost structures were steep. But the biggest challenge came from his father. “He was extremely skeptical and didn't want me to leave a cushy career in the US for the grind here," Wadhwa recalls.

Today, all that is history, thanks in a large part to India's well-structured national solar policy, which has set an aggressive target of 1,00,000 MW from solar power by 2022, from just 3,000 MW in December 2014. Wadhwa's ambitions are on a similar track. His pure-play startup is "one of the most successful and oldest players that has managed to get funding from reputed investors like International Finance Corporation," says Vinay Rustagi, managing director of consultancy firm Bridge to India. Azure has close to 250 MW of solar capacity and about 515 MW in the pipeline across 14 states, much of it in Punjab. As for his father, "after I won a contract I turned him around; he is now on board," says Wadhwa.

Investors look at Wadhwa as a pioneer in the sector. "He entered solar when it did not exist in India. Azure is well positioned to build 5 GW of solar in three to five years," says Sanjeev Aggarwal, cofounder of Helion Venture Partners, and an investor in Azure.

The renewable energy space is a $250-billion investment opportunity in India, according to some estimates. With the Modi government backing renewable energy to the hilt, the sector can be expected to get plenty of policy support to smoothen the glitches. So, from beefing up the grid network and setting up solar parks, to regulating tariffs and working out mechanisms to insulate solar power producers from indebted electricity boards, a slew of initiatives are in the works. Further, with better solar technology and dipping costs, solar power is almost reaching grid parity, increasing its appeal.

Azure Power faces two big challenges, one of them being the winner's curse. What many call irrational exuberance, aggresive bidding is driving tariffs to unsustainable levels in the sector. The latest winning bid in Andhra Pradesh was at Rs 4.63 per unit, which could raise viability concerns. "This concern has been there in every bid in the last three to four years," says Santosh Kamath, head of renewable energy, KPMG in India, seeking to allay such fears.

Two, the sector is seeing the arrival of big money, from the likes of SoftBank (with access to cheaper funds), which wants to invest $20 billion in solar projects in India. So relatively smaller players like Azure will be up against it. Rustagi, for his part, reckons Azure will hold its own. "This is just the tip of the iceberg. I think different players will find their niches." Well networked in India, Azure will be equipped to bag and execute smaller projects that are unattractive to large players and also tap niches like rooftop projects, which it is eyeing aggressively.

BigBasket has managed to become India's largest egrocer in a short span

(Hari Menon, cofounder BIGBASKET)

For the founders of egrocer Big-Basket, this is part II of their dotcom dreams. The first was in the 1990s when they started Fabmart.com, India's first online store that began by selling books and music. It was an idea ahead of its time. The founders struggled, persevered, and along the way pivoted the model and rebranded it Fabmall to include an offline component in the form of 210 stores. Eventually, they sold out to AV Birla Group's retail venture More in 2006. The cofounders then went their separate ways, taking up corporate jobs and chasing other dreams.

In 2011, they regrouped to start BigBasket. Expectedly, this time they were more seasoned, resilient, determined, meticulous and a lot more confident. BigBasket comes with a pedigree that few other egrocers in the country can lay claim to. And that's perhaps a reason for the startup managing to become the country's largest egrocer by revenues in a short span.

Cofounded by VS Sudhakar, Hari Menon, Vipul Parekh, VS Ramesh and Abhinay Choudhari, BigBasket has a bevy of top-notch investors including Bessemer Venture Partners, Helion Ventures, Zodius Capital, Ascent Capital, GrowthStory and LionRock Capital. It has raised Rs 1,080 crore so far and claims a valuation of Rs 2,500 crore. The startup which logged a turnover of Rs 220 crore in 2014-15 hopes to achieve a top line of Rs 1,000 crore in 2015-16.

From a staff count (direct and indirect) of over 7,000, Menon says it could cross 15,000 by next year end.

By 2017-18, BigBasket hopes to break even, even as it expands operations from 12 cities currently to 30 by then. "In three years, we will be among the top three grocery players in the country with a turnover of $1.5-2 billion," says cofounder Hari Menon. It is audaciously hoping to touch a monthly revenue run rate of Rs 1,000 crore by March 2018.

There are many reasons why Big-Basket is so confident and ambitious. It operates in a space that has huge potential. India's retail industry is pegged at $500 billion. Grocery is the biggest chunk pegged at $350 billion. The segment is dominated by neighbourhood kirana stores, despite the decade-long presence of organised retail, which is under 10% of the total. Clearly, it is a large opportunity that the startup is chasing. Grocery shopping while necessary is universally considered a chore that most households would prefer not to spend time on.

"There is a need and a huge opportunity in the home delivery space," says Menon. Understandably, it is a crowded space with many online national-regional players like Grofers, ZopNow, PepperTap and Mera-Grocer pulling out the stops. The big etailers like Amazon and Snapdeal too are entering the fray. Snapdeal offers products from Godrej Nature's Basket. "Like telecom, India will leapfrog. With online, we will bypass organised retail," says Sanjeev Aggarwal, cofounder, Helion Venture Partners, who is on board of BigBasket and one of the investors.

A few things differentiate BigBasket from the rest of the pack. This is the only inventory-led player that has invested heavily at both the back and front ends. "Grocery is a complex, process-driven sector that requires a deep understanding and a high execution focus to remain in business," says Menon.

Adds Aggarwal: "They own the inventory. And by cutting out the middle men, they are the only online player with strong unit economics."

BigBasket is further building on its strengths. Making its front end and back end more efficient is a top priority. For example, three years from now it is hoping to use robotics and warehousing automation tools that will make its backend more efficient. It has rolled out a new service called BB Express that assures delivery within 60 minutes of placing an order. In the next two months it hopes to take the service to eight of the 12 cities they are present in. Even their 12-city presence will go up to 27 by March.

To have a better grip on the last mile, Big-Basket recently acquired Bengaluru-based delivery startup Delyver. The company is investing heavily in the supply chain and is setting up 16 collection centres close to farming centres. It is also building eight large warehouses in the big cities. To further improve its margins, the egrocer is laying a thrust on private labels, which today account for 32% of sales; Menon hopes to take it to 40% within a year.

BigBasket has signed up Shah Rukh Khan as its brand ambassador and has rolled out a high voltage ad campaigns to strengthen its brand. Investors are betting that BigBasket's hard work and Khan’s magic will help BigBasket coast into the billion dollar league, not just in valuation but in something more tangible — revenues.

Freshdesk has so far had few problems in snaring customers as well as funding

(Girish Mathrubootham, cofounder)

Can the shipment of a broken TV inspire somebody to start a company? Well, this is what happened to Girish Mathrubootham, cofounder of Freshdesk, a cloud-based helpdesk software company with offices in Silicon Valley, Chennai, London and Sydney.

In mid-2010, Mathrubootham was moving back to India from Texas and had shipped all his belongings back home. Two months later, when the shipment arrived in Chennai, he found the screen of his LCD TV broken. After trying in vain for six months to get compensation, Mathrubootham vented his angst online. It did wonders; Girish got his money back. "I saw the need for a better customer support solution," he recalls.

While the inspiration for Freshdesk was a nightmarish consumer experience, the trigger to take the entrepreneurial plunge was the news of an up to 300% hike in prices announced by Zendesk, a provider of cloudbased customer services based out of San Francisco. Mathrubootham, then vice-president of product management at Zoho, a suite of online productivity tools and SaaS (Software as a Service) applications, saw the potential to build a SaaS-based help desk software and sell it to customers globally. He roped in friend and colleague Shan Krishnasamy, and Freshdesk was born in October 2010.

"A key transformational moment in my career is that I understood the importance of riding a wave," reckons Mathrubootham. The SaaS wave was just taking shape in India, venture capital investors were actively tracking the space and Mathrubootham knew that funds could be raised if he showed early momentum.

Freshdesk did achieve early traction, and it was in large measure due to carefully orchestrated product positioning — as good as Zendesk, but cheaper and more intuitive than its bigger rival. In November 2011, Freshdesk raised a Series-A round, its first, of $1 million from Accel Partners. In April next year, it raised its second round of funding of $5 million, and over the next eight months managed to get over 3,000 enterprise customers.

Five years down the line, Freshdesk has over 50,000 customers across 120 countries, an employee headcount of over 550, and has had five rounds of funding. It has raised $93 million from Accel Partners, Tiger Global and Google Capital, and has seen its valuation grow three times each year over the last three years.

The company is well poised to take the next big leap, with an eye on the massive and untapped international small & medium enterprises market. The startup has shown its aggressive growth streak by acquiring a series of companies over the last few months. While it bought Konotor, a mobile-first user engagement platform, in mid-December, it acquired video chat and co browsing platform 1CLICK and social recommendation app Frilp in August and October, respectively.

Ask Mathrubootham whether the startup has the unflinching support of the investors, and he sounds confident. "VCs always invest in good companies with solid metrics, both in good as well as bad times," he contends, adding that Freshdesk has been generating revenue since the first day and investors are extremely happy with its growth and sustainability.CarDekho.com is on overdrive establishing its presence in a host of auto-related areas

(Amit Jain, cofounder GIRNARSOFT, an automobile e-ecosystem)

The year 2015 was all about the big horizontal etailers. They made headlines amid surging valuations, sharp scaleup and rising consumer traffic to their marketplaces. Now as valuations peak and they head into consolidation phase, the gaze is turning to sector-focused vertical etaliers.

For any household, the two biggest buckets of spends are real estate and automobile. Understandably, those two segments are seeing lot of traction among investors in the online world. And that may be a reason for GirnarSoft and CarDekho.com figuring on this list.

A chance visit to the International Auto Expo in Delhi in the latter half of the 2000s led the promoters of GirnarSoft, a small IT firm then, to set up CarDekho.com in 2008. The initial aim was to offer a one-stop shop for new car buyers to do online research and assist them in their buying decision. Advertising on the platform and leads to dealers were the two main revenue streams then. Since then the startup has rapidly evolved.

Over the years GirnarSoft has built an entire ecosystem focused on the automobile sector — CarDekho.com (for sale of new cars), Gaadi. com (used cars), BikeDekho.com (two-wheelers), PriceDekho.com (a price comparison website), TrucksDekho. com and TyreDekho.com. An international arm, CarBay.com, is present in 26 countries across South East Asia, the Gulf and Latin America. For GirnarSoft, valued at roughly Rs 2,500 crore, CarDekho. com is the flagship portal.

The company today has 2,400 employees, 1,900 new car dealers, 4,000 used car dealers and gets 33 million visitors a month (this includes traffic to Gaadi.com, which GirnarSoft acquired in 2014). With a tight control on expenses and a sharp thrust on growth, the company claims it is operationally profitable. "The money we lose is on TV ads. But that's for our long-term brand building," says cofounder Amit Jain. The business model clearly has had few problems attracting investors, from Sequoia Capital, Hillhouse Capital and Tybourne Capital, to Ratan Tata and HDFC Bank. According to news reports, Google Capital, a growth equity investment fund, which has been selective in its picks in India, may also invest.

India is among the top six automotive markets in the world (the largest in two-wheelers) and the government is betting on it to be the third largest by 2026. For a young nation, with the world's third largest internet base, online will play a critical role.

While online automobile sales are negligible today, portals like CarDekho have become important destinations for both consumers and automotive majors to seek and offer information. Thus they have a significant influence on purchase decisions. That influence can only evolve and extend to purchases themselves. Last year, Hero MotoCorp tied up with Snapdeal and in 10 months reportedly sold 3,00,000 motorcycles worth Rs 1,500 crore.

For auto spares alone, the potential is enormous. In China, $613 million worth of spare parts were sold in 2014; that figure is expected to touch $4.48 billion by 2020. In India, at $27 million in 2014, spare part sales will likely touch $150 million by 2020, says Aswin Kumar P, programme manager at Frost & Sullivan India. About 10% of the advertising spend by the industry ($900 million annually) goes into digital media, and it’s growing rapidly.

CarDekho's nearest rival is CarTrade.com, which acquired CarWale.com in November 2015. CarDekho too has been on an acquisition spree. Other than Gaadi.com, it acquired ZigWheels.com, an auto portal, in 2015. It is also adding products and service offerings — insurance, road-side assistance, car accessories — to make the model more robust. "We have a sound revenue and profit roadmap. We will be a unicorn within the next three years," says a confident Jain.GreyOrange -only Indian startup focused on solving etailers' supply chain problems

(Samay Kohli and Akash Gupta, cofounders GREYORANGE)

The best startups are those that are born out of passion. Grey-Orange is one of them.

When Akash Gupta and Samay Kohli were studying at Birla Institute of Technology & Science-Pilani, they developed what was perhaps India’s first home-grown humanoid called AcYut.

They travelled the world competing at and winning many robotic competitions at top universities including Stanford and UC Berkeley. After completing their engineering, instead of chasing a corporate career the duo started an education and training company in the robotics space. They soon decided to venture into industrial robot manufacturing. If their startup is called GreyOrange, it is for a reason: Grey is a proxy for experience and Orange for the fun quotient. "We are one of the very few companies in the world and the only one in India focused on solving etailers' supply chain problems," says Gupta.

A few broad thoughts shaped their startup. The founders wanted to build a hardware product capable of tackling a problem that had massive scale potential. "Representing India and competing at the international level gave us a very global approach to building our business," says Kohli. The duo looked at many industries from logistics to oil & gas before zeroing on the warehousing needs of etailers. Today, it builds robots — of three kinds, called Profiler, Sorter and Butler — that operate in the warehouses of etailers and logistics firms, helping them gain efficiencies and minimise errors. GreyOrange competes with global players like San Jose-based Fetch Robotics (in which Soft-Bank entered as an investor in mid-2015) and Kiva Systems, which was acquired by Amazon for $775 million.

GreyOrange has a staff strength of 300-odd employees, operates out of three cities in India and has two offices in Singapore and Hong Kong. It claims that it dominates the logistics automation business India with an over 90% market share and has 12 clients, 10 in India including Flipkart, Amazon, Jabong, Delhivery, Gojavas and DTDC. "They offer competitive solutions that are attuned to the Indian environment," says Abhishek Chakraborty, executive director, DTDC Express. GreyOrange is now thinking big as it readies a worldclass 1,200-seater R&D facility in Gurgaon equipped with a prototype centre. Having raised $35 million from investors like Tiger Global, Blume Ventures and a few angel investors since inception, it is initially looking to expand overseas into markets like Japan and China and later South East Asia, the Gulf and Europe. "Yes there are older and bigger robotic companies overseas. But our technology is much more on the cloud, and advanced. We are disrupting the market. It is easier for a new player to do it," says Kohli.

Developing and manufacturing products in India, GreyOrange will have some cost advantages — they claim they are five times cheaper than other providers in India and two-and-a-half times globally. But that's not what the founders are looking to exploit. "It is not the price but the technology that will give us the competitive edge," Kohli says. As they plan to scale up from a headcount of 300 to over 500 in a year, people issues are their biggest challenges, they say. "We will have people joining us from different cultures and regions. As an organisation, we need to assimilate them and drive the team around the same vision. It is a big challenge," says Gupta.

Grofers' breakneck speed is doing wonders to its valuation

(Saurabh Kumar, cofounder GROFERS)

In the 12 months till November 2015, the valuation of Grofers, a Gurgaon-based hyperlocal grocery delivery firm, has grown 10-fold to around $200 million. That was the month in which it closed its latest round of funding of $120 million from Softbank, Tiger Global, Russian billionaire Yuri Milner and Sequoia Capital. In those 12 months, the company which started as a B2B services provider for online grocers, before pivoting to its current hyperlocal focus, has expanded to 26 cities and works with 10,000 merchants.

"We are in the habit-forming phase with consumers,” says chief executive and cofounder Saurabh Kumar. "We have begun to replace the phone call to the local grocer or kiranawalla." Despite this sharp growth (Grofers has hired some 3,500 and plans to add several thousand more in the next 12 to 18 months), Kumar, a civil engineer from IIT Bombay, believes the company has only laid the most preliminary building blocks for its business. "Of the overall market of $500 billion, roughly 70% is groceries and the amount that has moved online is minuscule," he contends.

Instead, Kumar and his team are working at breakneck speed to build a backend to keep pace with this growth. "The winner in this highlycompetitive market is the one who is able to build this robust backend to support this growth… we are doing around 30,000 deliveries a day and anticipate in the next few months itself this will cross one lakh," he says.

It isn't just the delivery network that gives Kumar sleepless nights; he and the Grofers team are obsessed with expanding the assortment — range of products — available to browsers online. And, consumers appear to be biting. "We are overwhelmed with the way demand has grown," Kumar says. Average order size has increased from Rs 400 to around Rs 750, he adds.

Critics of the hyperlocal delivery business argue that businesses such as Grofers are building ventures mostly focused on sky-high valuations, with little focus on the bottomline. The economics don’t work out, these doubters contend, since order sizes are too fractional to justify the cost of sourcing them (often from multiple local stores) and delivering them to customers. “Everyone was chasing growth at the cost of building systems to support this scale…there was and is a lot of froth in the industry, but that is settling down,” says Kumar. As some local ventures have struggled, Grofers has grown as it has leaned on some old skills learnt as a B2B player. "We are the largest player in the market today and we think we also have the solid base required to grow this business into a billiondollar entity," says Kumar.

Grofers doesn't expect to make the journey on its own steam entirely. In the last couple of months, it has made two acquihires of startups Townrush and SpoonJoy as it sought to fatten its management team and add local expertise. While growing and managing a hyperlocal business may be a part of Grofers' agenda, the other key requirement is convincing technology-averse grocers to come aboard. According to Kumar, Grofers adds around 10% incremental business every month, but thinks that as technology and systems improve this could go up significantly. "It used to be difficult in the beginning…but especially in this market your reputation is built on word-ofmouth marketing," Kumar says. "We are replacing an unreliable system with something more predictable and giving grocers incremental revenue for no cost to their own topline."

Lendingkart sees potential in providing credit to those who need it but don't get it

(Harshvardhan Lunia, cofounder, LENDINGKART)

What happens when a banker and a data scientist come together? Simple, the science of online lending gets simplified. This is what Harshvardhan Lunia did when he joined hands with his friend Mukul Sachan, a former Indian Space Research Organisation (ISRO) scientist, to roll out Lendingkart in April 2014. The Bengaluru-based online lending startup, which provides shortterm working capital loans from Rs 50,000 up to Rs 1 crore, has so far disbursed loans in 75 cities across 22 states.

What made Lunia take a plunge into the financial technology segment was the realisation during his stint with a couple of big private sector and multinational banks that it was well-nigh impossible for countless small business owners to get loans despite being credit worthy. However, the inspiration for the startup was of course the poster boy of America’s online lending ecosystem: Lendingclub, which is listed on the New York Stock Exchange and has a market value of roughly $4.15 billion.

"From being a startup that witnessed one of the worst economic phases in 2008 to going public last year, Lendingclub's journey has a lot to offer entrepreneurs like us," reckons Lunia. A year after their launch in 2008, when consumer lending was tedious and investor yields tanked, Lendingclub turned the tables, he adds.

Now Lunia is trying to put to use those learnings. "In India, we are looking at a Rs 9 lakh crore deficit in financing. It's a huge and highly underserved market," he contends.

Clearly, there is a massive opportunity and Lunia has been addressing it systematically. First, he identified the pain area: most of the new small businesses and small and medium-sized enterprises (SME) do not get loans from conventional channels like banks or NBFCs. Reason: inefficiencies in the SME lending space. The credit decisions in banks take months, any potential analysis gets hindered by lack or complete absence of data and information asymmetry is widespread.

Of the 700 towns and cities in India, barely 150 have direct access to credit, reckons Lunia. Moreover, 92.77% SME beneficiaries have no finance, 5.18% avail finance from institutional sources and 2.05% through non-institutional sources. "Banks and financial institutions don't cater to this loan segment making it a big opportunity," he says. Lendingkart raised its seed funding from India Quotient, Ashish Goenka, Ash Lilani and Saama Capital in January 2015; that was followed by a Series A funding from Saama Capital, Mayfield Fund, Shailesh Mehta and Ashvin Chadha in July 2015.

"Our aim is to expand to every nook and corner of the country," asserts Lunia, who has been using technology to make lending as seamless as possible. Consider this: while Lendingkart took a week to evaluate and disburse loans in July 2014, today it takes less than 15 minutes to process an application, four hours to evaluate the process and between one and three days to disburse the loan.

"Use of technology and analytics has ensured that our cost of origination, distribution and delivery is much lower than that of conventional banks and financial institutions," he asserts.

Globally, financial technology has been a hot segment for investors. It’s estimated that the amount of investment in the segment has grown by 176% in four years — from 2010 to 2014 — with companies like Google, Intel and Microsoft investing in this space, says Lunia. "In the long run, we aspire to be like Lendingclub." Of course, Lunia will also be aware that the online lending space needs regulation which may prove a stumbling block in the short to medium term. Eventually, though, any regulated business is more robust and viable than an unregulated one.LimeRoad's unique social shopping thrust makes it a potential unicorn

(Suchi Mukherjee, founder LIMEROAD)

Founders will give you various reasons for starting up their ventures, but few will mention "utter frustration" as one of them. In 2010, while flipping through a glossy magazine after the birth of her second child in London, Suchi Mukherjee, one of the three cofounders of LimeRoad, glanced upon a piece of jewellery made by a small store in Mumbai. Enamoured, Mukherjee tried to buy it but couldn't as it was not accessible.

"I realised that there was no consumer technology play that made discovery of lovely products easy and entertaining," she recalls, adding that absence of a place from where one could access the vast array of products made in South East Asia left her exasperated. That's how LimeRoad, a social shopping portal focused on women and fashion was founded, says Mukherjee, along with Ankush Mehra and Prashant Malik.

LimeRoad claims that there are 20,000 sellers on its platform, its gross merchandise has jumped 600% over the last 12 months, the scrapbooking community has increased from 30,000 to 75,000 over the past year and the 3 million style statements posted as scrapbooks amount to over 100 times growth in less than a year, and it has increased its headcount from 50 to 450 in three years.

Small wonder, the startup has managed to raise $50 million in three rounds of funding so far and counts Tiger Global, Matrix Partners and Lightspeed Venture Partners as its investors.

But is the business model scalable enough to make LimeRoad a potential unicorn? Mukherjee thinks so, since nearly half of online shoppers are women in India, and shopping is more of a behavioural attribute, she says. "LimeRoad, being a women's only discovery platform, is the only player in Indian ecommerce to have grown 600% in the last one year," she asserts.

The use of technology is what differentiates LimeRoad from other players in the market, she contends, as she rattles out the numbers. Consumers come back on an average 84 times a year on the app, with conversion rates to buying hovering at 8% per month. LimeRoad has always managed a super thin fixed cost structure, using technology to scale, she adds for good measure.

Another feature that differentiates LimeRoad from its rivals is user-generated content. Mukherjee believes that for women, lifestyle product access and discovery is a huge problem, particularly given the long tail in options across categories. LimeRoad, she claims, provides the most extensive discovery platform, where consumers come because they get to discover simply great products at affordable prices. "We do this by not merely loading products on a platform, like most oldschool marketplaces, but by making them discoverable through user-generated content," she says.

What is more, Tiger Global, one of the investors in LimeRoad, is also a top investor in Flipkart. Does Mukherjee lose sleep over the prospect of being acquired or merged into another fashion startup at some stage, what with investors likely to consolidate their portfolio over the next few months? Mukherjee doesn't rule it out. "Everything is always a possibility — to be acquired or acquire a company. Our goal is to reach out to every single woman in this country and convert her into a LimeRoad user," she says.

MobiKwik set to shift into higher gear in mobile wallet market

(Bipin Preet Singh, founder MOBIKWIK)In the age of 12 and 18-month-old startups raising millions of dollars from venture capital investors and boasting about ambitious growth plans, MobiKwik comes across as the ponderous senior citizen. For one, the company was founded back in 2009 (many founders were yet in college then); for another, it hasn't been in a hurry to build an explosively growing startup. Instead, the founders of MobiKwik have brought the business to a slow boil, spending this time figuring out the digital payments and mobile wallets market and only raising their second round of funding in 2015, a good six years after getting off the ground.

Although the founders have only been sipping at their funding to drive growth, MobiKwik has some impressive numbers to offer sceptics. Today it has 25 million users and processes half a million transactions a day, across 50,000 merchants, with its mobile wallet. "People are using their mobile phones more than they use their cards and other electronic forms of payment," says founder Bipin Preet Singh.

India today has some six million credit card and some 40 million debit card holders — for a population of over a billion that's a tiny figure, according to Singh. He points out that there are some 200 million smartphone users in India, all of whom are potential MobiKwik users. While mobile wallet-based payments started with recharge for mobile services and DTH television and then graduated more recently to ecommerce, the next step will involve pushing offline companies to accept mobile wallets. Already, MobiKwik is pushing ahead with this plan, with companies such as Big Bazaar (which gets about 2% of its overall business from MobiKwik payments), Café Coffee Day, Sagar Ratna and WH Smith among a fastgrowing list of merchants accepting this form of payment. "We want to reach a stage where you step out of home and should be able to pay anywhere for anything… you shouldn’t need to carry cash or cards to pay the local grocer, taxi and any other product or service," says Singh.

While MobiKwik may have been off to a slow start (Singh prefers to call it measured), it has gathered strong momentum in the past 12 to 18 months. For example, it had barely eight million users 12 months ago processed some 2,00,000 transactions and most tellingly had fewer than 4,000 merchants signed up. As companies have become more confident with MobiKwik's mobile wallet, they have eagerly signed on, with the promise of both quicker payments and to distance themselves from handling cash transactions. "Once we have people's trust, we can think of what we can do beyond our core business of mobile wallets,” says Singh. "We want to make everything seamless for consumers…we want them to be able to manage their money without logging into bank accounts or signing a piece of paper," Singh claims. For the moment, MobiKwik wants to cross $1 billion in gross merchandise volume (GMV) in the next six to nine months and simultaneously unveil its plans to become a broader provider of financial services products — on the mobile phone. With another $100 million round of funding in the works, it is also ensuring it has the financial wherewithal to back its ambitious plans.

OYO Rooms - How a 17-year-old sniffed out an opportunity 5 years ago

(Ritesh Agarwal, founder OYO ROOMS)

When a 22-year-old talks about his plans to build a billion dollar business, you’d be tempted to humour him. Till he lets on that his venture has raised $125 million, that its valuation has soared 15 times in a year and, well, that he is the proud founder of what has emerged as India's largest aggregator of online budget rooms, a business that didn't quite exist before OYO Rooms took shape in May 2013. For good measure, last month, OYO snapped up the second largest player in the segment, ZO Rooms.

"We have the world's leading investors (SoftBank, Lightspeed Ventures, Sequoia Capital and Greenoaks) backing our business model and management team," asserts Ritesh Agarwal, the 22-year-old in question. "Investors believe in the fundamentals of the business as we attempt to solve a real customer problem through experimentation, innovation and ambitious disruption of the market." The investors, Agarwal elaborates, also facilitate learnings from global startups.

The growth metrics of OYO so far show its intent to build a robust business. From one hotel in Gurgaon in May 2013 to 4,000 properties, from less than 100 employees a year ago to 2,000 employees now, and with an inventory of 40,000 rooms across 150 cities, OYO has been working hard to tap the market potential which is immense, contends Agarwal. It estimated that 1.8 million Indian rooms are in unbranded hotels, compared with 1,12,000 in the branded category.

"Only about 2% of this has been tapped so far. So there is plenty of headroom for growth," asserts Agarwal.

What made Agarwal realise the potential of the sector was when he travelled across India. "I was 17 and stayed in over 150 bed and breakfasts, guest houses and hotels across the country," he recalls, adding that he saw an opportunity to aggregate, list and promote little-or-lesser-known accommodation options to travellers. "From this idea, Oravel Stays was conceptualised in early 2012," he says.

However, as Agarwal got more entrenched in this business, he realised that on-ground experience was a major area of concern for travellers. Premium and chain hotels promised and delivered a largely standardised experience but there was no hotel that was doing this on any scale for the mass market, he contends. Upon booking a room at a budget hotel, a customer would be clueless about the kind of room and amenities he would get till he actually entered the hotel room. The real reason for the sluggish pace of growth in the budget hospitality sector was not discoverability of accommodation but rather lack of credibility around the offerings, he reckons.

"So I decided to pivot the business from a discovery marketplace to a managed marketplace for standardised hotels and launched OYO Rooms in May 2013," says Agarwal. The startup's twin strengths: an agile team and robust technology that are working in tandem to build a strong execution capability.

Portea is counting on a full-blown boom in demand for home healthcare services

(Meena Ganesh, cofounder, PORTEA)

It didn't take much time for the Ganeshs to decide which sector to foray next after selling online education company TutorVista to UK publishing giant Pearson in early 2013 for $213 million. The husband-wife duo's choice was dictated by a personal experience.

In 2010, a member of Meena Ganesh's immediate family was diagnosed with cancer. "We experienced, first-hand, the difficulties in taking care of a terminally-ill person," recalls Meena, adding that it made her realise that there was a genuine dearth of options for medical care at home in India. Access to healthcare was a big pain point, and while India had worldclass tertiary care facilities, any healthcare infra outside of corporate hospitals in metros was nonexistent.

"There was simply no organised, branded, high quality and reliable home healthcare provider,” she points out. Of the $80 billion healthcare industry in India, $40 billion is non-tertiary care and there are no credible players in this space, informs Ganesh. “While treatment can be carried at a hospital, healing happens best in a home environment," she adds.

Along with husband Ganesh Krishnan, Meena forayed into the healthcare segment with Portea in June 2013. Portea, which started from a small office, with a skeletal team and less than 50 customers across two cities, is now India's largest home healthcare company, asserts Meena, who dishes out numbers to show how quickly the company has grown.

From just two cities in 2013, Portea is now present across 24 cities in India and four cities in Malaysia; it has taken its headcount from 50 in 2013 to over 3,500; and from around 50 patients using its services per day in 2013, the numbers now stand at over 2,000. It is also betting big on the inorganic route: while in October 2015 Portea bought specialty pharmaceutical distributor Medybiz Pharma, it is set to close two more acquisitions in a few weeks, claims Meena, adding that the company also plans to expand to the entire South East Asia over the next two years.

Meena believes the company has barely scratched the surface. India is greying at a rapid rate and faces a major crisis in the paucity of options for geriatric care and managing the burden of chronic disease. At present, India's 100 million seniors constitute 8% of the population, and the figure is expected to touch 324 million by 2050 when seniors will account for 20% of the population. “Because of increasing longevity and the rise of nuclear families, the demand for elder care is increasing exponentially."

Add to this the explosion of noncommunicable diseases. By 2050, of the 324 million over-60s, 200 million are likely to be suffering from chronic ailments, underscoring the multipronged nature of the problem confronting the country. "The industry in the next 10 years will grow to over $15 billion in India from $3 billion today," asserts Meena.

ShopClues - Not just another marketplace

(Radhika Aggarwal and Sanjay Sethi, cofounders, ShopClues)

At first blush, it is easy to be skeptical about ShopClues which, as an online marketplace, would tend to come to mind only after the Big Four — Flipkart, Snapdeal, Amazon and Paytm. Compared to the funding, buzz and headlines these etailers have generated, ShopClues would come a poor fifth. And to top it all ShopClues started on a bad note. In 2013, cofounder Sandeep Aggarwal — the man at the helm then — was charged in a case of insider trading in the US. Since, Sandeep has pleaded guilty and stepped down from ShopClues and has no active role in the startup.

So why then are investors still excited about the startup? In early 2015, for instance, Tiger Global — a big investor in Flipkart that has also funded Amazon — invested in ShopClues. And the buzz is that the startup is close to tying up another round of funding — this at a time when the ecommerce space looks distinctly crowded, overvalued and prime for consolidation.

Set up in 2011, ShopClues has 950 employees and has raised $120 million so far (Flipkart in contrast has raised over $3 billion and was last valued at $15 billion in 2015). It has 3 lakh merchants on its platform across 6,000 categories and 2.5 crore stock keeping units (SKU), and ships 3 million orders every month.

But here's what differentiates ShopClues in a crowded space. It is tightly focused on the unstructured, often unbranded (or catering to local and regional brands) mass market segment, a notch lower than the segments Flipkart, Snapdeal, Amazon are looking at. About 70% of its orders come from smaller towns and cities, it says. "The marketplace is part of our DNA. And that is our USP," says Radhika Aggarwal, cofounder, ShopClues, comparing it with Taobao of the Alibaba group in China. Shunning the bruising deep-discount driven model, the startup is focused on smaller merchants where it has greater scope for margin negotiation.

In a world where gross merchandise volume (GMV), valuations and large marketing-branding budgets are normal, ShopClues says it prefers a more conservative approach. It has almost avoided mainstream media, leaning on economical and efficient social media and regional and vernacular outlets to reach out to its target segment. "We spend 1/10th the money that our bigger competitors do to generate similar returns on investment," claims cofounder Sanjay Sethi.

Sethi says ShopClues isn't focused just on consumers but also on enabling and empowering its merchants to grow its ecosystem. For example, as soon as a merchant signs up on its platform, ShopClues helps build a dedicated website for them and supports them with branding and marketing tools. Now it is helping them go hyperlocal. This shows up in the way it earns money — about 70% of its income comes from transactions, and the rest from non-transactional areas like support and services provided to the merchants. "Remember, nontransaction income is technology-based and scalable without incurring any cost. We would like to see that go up to 40%," says Sethi, who honed his skills as senior director, products, at eBay, California, before cofounding ShopClues.

ShopClues is confident it will make an operational cash profit by 2016 end. "They will never be the volume player. They have chosen to fight the profitability game. They have the best margin structure in the industry. Their cash burn is low,” says Sanjeev Aggarwal, cofounder, Helion Venture Partners, one of Shop-Clues' investors.

Swiggy eyes allied opportunities to flank the food ordering business

(Sriharsha Majety, cofounder, Swiggy)

In the past few months Bengaluru-based food delivery venture Swiggy has watched its largest rivals wither. First TinyOwl announced it was laying off a couple of hundred employees and shuttering offices nationwide to slow down cash burn. And earlier this week Foodpanda reportedly laid off a little over 300 employees, roughly 15% of its workforce.

For Sriharsha Majety, these stories have offered a cautionary tale of greed for growth with little focus on building a stable business. He hopes to avoid these air pockets with his business, which raised its last round of $30 million in June 2015 from Norwest Venture Partners, SAIF and Accel Partners and is already in the market for its next tranche — reportedly in the region of $100 million. "We are only in eight cities and cover some 5,000 restaurants," he says. "We are taking time to build a scalable business, because we want to change the way India eats."

To try to build a meatier business, Swiggy says it wants customers to order off its platform as many as four times a day. "We see our business growing 50 or 60-fold in the next three or four years as we bring more restaurants online and people too get comfortable ordering a variety of food,” says Majety. "We went from one city to eight cities in six months and proved that the model is highly scalable."

Now, it appears Swiggy is pausing and taking a breath, surveying the markets it is currently in and where it needs to go. "We are widely present in Bengaluru and Hyderabad, but scantily in other cities including Mumbai and Delhi, which present massive opportunities for us,” he explains. "We need to make sure we get our strategy right."

Going forward, he may need to rethink Swiggy as a business. While food ordering may have been the way it got started, the future may hold a different opportunity for the company. For example, Swiggy is a night and weekend-heavy business, even as many restaurants they work with are trying to build all-day businesses. Second, popular chains may not have a physical presence close from where it gets a bulk of its orders. For the first challenge, Majety and Co want to work with a broader range of businesses (think of caterers, for example) to try and evolve food into something of a utility. "We eventually want breakfast to arrive automatically at a customer's doorstep like the newspaper and milk… it should become a pre-ordered set up, with little headache for the customer," he says.

Then, Swiggy wants to use some part of the funding it has raised to jointly set up service-only kitchens for these joints to tap areas where they get plenty of orders from but are relatively geographically distant.

Majety believes Swiggy can use its growing base of customer orders and to build a personalised interface for individual customers and help them make informed choices. "Like music, movies and books, people usually have barely 30 minutes to eat a meal… people are happy to get help with their choices," says Majety. And the profit imperative? "Profitability is a goal post… it doesn't have to be immediate," he adds.

UrbanClap wants to provide reliable services

(Abhiraj Bhal, cofounder of UrbanClap)

Three times a week, the founders of UrbanClap, a Delhi-based local services provider, say they receive requests from stricken rivals who want to be acquired. Backed by some $37 million in funding from the likes of Bessemer Venture Partners, SAIF and Accel, the company founded just two years ago has become the category’s proverbial 800-pound gorilla. UrbanClap works with some 25,000 service providers in eight cities and its founders say it processes 4,000-5,000 customer requests daily. Rather than focus on just providing low-value, low-repeat services (think of the odd plumbing job), the startup has sought to fatten its business by providing a wider assortment of offerings. So, among its services providers are wedding photographers, interior designers and birthday party-planners.

"We are trying to address a basic problem that millions of Indians face," says cofounder Abhiraj Bhal. "The access to high-quality, reliable service providers remains an unmet challenge." Along with groceries and budget hotels, Bhal believes services will form the next logical growth driver for India's thriving ecommerce market.

According to Bhal, the addressable market for their services is around 100 million Indian middle class folk across the top 25 cities. "We are six or seven times as large as our nearest competitor," he adds. "We will work with 2,00,000 service providers by the end of 2016 and we will handle 1,00,000 customer requests a day."

In some ways, UrbanClap is following the trends in the broader ecommerce market, where large players such as Flipkart are dominant (in apparel, for example, it does more business than its category-focused rivals), and the same holds true in the services market. "The vertical services providers are stuck with lowfrequency, low-value offerings…in a difficult market, they will struggle," Bhal argues.

Bhal and the other cofounders are acutely aware of the challenges of starting up. Prior to UrbanClap, Bhal cofounded a company that aimed at providing video-on-demand services to long-range public transport. While the idea sounded promising and initial interest strong, the business struggled to gain enough customers and backers and ran aground. Another cofounder Raghav Chandra, who worked with Twitter in its infancy, too tried his hand at starting up an autorickshaw aggregation service, which folded. Fingers burnt, the cofounders have reset their ambitions. "We don't want to build a cute, lifestyle business…we want to construct a large impactful business in the next seven to 10 years," Bhal claims. "The challenge for us is to grow from say 2,50,000 service providers to say two million of them…we are already investing in skilling programmes ahead of our growth curve to ensure availability," he adds.

Urban Ladder is a rare startup that had to actually scale down before it scaled up

(Ashish Goel (right) and Rajiv Srivastava, cofounders, Urban Ladder)

With seed capital secure before they launched and startup stars in their eyes, the founders of Urban Ladder decided to go for broke when they launched in July 2012. The company, initially backed by Kalaari Capital (it has since raised $77 million from the likes of Sequoia Capital, Steadview Capital and TR Capital), launched its services across the country, leaning on third-party logistics providers to make deliveries. Rather than plaudits, Urban Ladder was inundated by customer complaints. Realising its folly, the company did something unexpected — it went from a pan-India presence to operations in just one city. "As a young startup our only mantra was how to grow rapidly," says Ashish Goel, a cofounder of Urban Ladder.

As it turned out, building an online furniture business was much more than warpspeed growth. "We operate in a trust-deficit market," he adds, “We want to stand out with a focus on product, supply chain and logistics, as we seek to build a large, stable and scalable business."

In the last couple of years, Urban Ladder appears to have made up for lost time, with the cofounders claiming that the company is 40-50% ahead of its own targets in terms of customer acquisition, revenues and catalogue.

"We had projected 10,000 shipments per month by December 2015, whereas we do tens of thousands of shipments today…we are 18-24 months from what we call making a million homes beautiful," says Goel. The company has painstakingly built its own delivery network and supply chain to try to keep product quality high and today delivers to 17 cities.

According to industry estimates, the furniture market is worth $25 billion, with the organised segment accounting for barely 1% of this and online players an even smaller sliver. Goel says that Urban Ladder has had to build its market from scratch; furniture design and construction continues to be dominated by the unorganised sector and the packaging and delivery of these products continues to be a hit-and-miss affair.

Three years ago, when a fledgling Urban Ladder decided to shrink its services to one city, it gave up 70-75% of its business, when it encountered low quality logistics, with hundreds of delayed deliveries or broken products. Since then, the company has worked to rebuild its reputation and create its own delivery network. "You have to build service to delight (doubting) customers and create an intimate and delightful experience," says cofounder Rajiv Srivastava.

“A divorce could reshape the global wealth ranking. If the couple split their fortune equally, it could leave wife MacKenzie with $69 billion, making her world’s richest woman. It could also make Microsoft's Bill Gates the planet’s richest person once again,” reported Bloomberg. Amazon founder Bezos was dating Lauren Sanchez, a 49-year-old ex-news anchor.